REG - Sage Group PLC (The) - Results for the year ended 30 September 2025
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RNS Number : 0746I Sage Group PLC (The) 19 November 2025
The Sage Group plc
Results for the year ended 30 September 2025 (audited)
19 November 2025
Strategic focus driving strong, sustainable growth
Steve Hare, Chief Executive Officer, commented:
"Sage delivered another good performance in FY25. Strong, broad-based revenue
growth and significant margin expansion reflect our focus on strategic
execution, our resilient business model, and continuing investment in our
products, our platform and our people.
"We are excited by the pace of technological change. AI is opening up new
possibilities for businesses and creating a significant opportunity for Sage,
enabling us to enhance and accelerate the benefits our software provides. Sage
Copilot is already creating value, helping customers make smarter decisions
and be more productive, while our launch of AI agents is delivering the next
wave of intelligent solutions.
"With our global platform, trusted brand and focused innovation strategy, Sage
is exceptionally well positioned to support small and mid-sized businesses as
they adopt AI-enabled services. This drives confidence in our ability to
deliver strong, sustainable growth and long-term value for all stakeholders."
Underlying Financial APMs i (#_edn1) FY25 FY24 ii (#_edn2) Change Organic
Change
Annualised Recurring Revenue (ARR) £2,574m £2,329m +11% +10%
Underlying Total Revenue £2,513m £2,290m +10% +9%
Underlying Operating Profit £600m £513m +17% +16%
% Underlying Operating Profit Margin 23.9% 22.4% +1.5 ppts +1.5 ppts
Underlying EBITDA £694m £605m +15%
% Underlying EBITDA Margin 27.6% 26.4% +1.2 ppts
Underlying Basic EPS (p) 43.2p 36.7p +18%
Underlying Cash Conversion 110% 123% -13 ppts
Statutory Measures FY25 FY24 Change
Revenue £2,513m £2,332m +8%
Operating Profit £530m £452m +17%
% Operating Profit Margin 21.1% 19.4% +1.7 ppts
Basic EPS (p) 37.7p 32.1p +18%
Dividend Per Share (p) 21.85p 20.45p +7%
Please note that tables may not cast and change percentages may not calculate
precisely due to rounding.
Financial highlights
· Underlying total revenue increased by 10% to £2,513m, reflecting
our high-quality subscription-based recurring revenue model.
· Underlying operating profit grew by 17% to £600m, driving a strong
margin increase of 150 basis points to 23.9%, with disciplined cost management
supporting ongoing investment.
· Underlying EBITDA increased by 15% to £694m, with margin
increasing by 120 basis points to 27.6%.
· Statutory operating profit increased by 17% to £530m reflecting
growth in underlying operating profit together with lower acquisition-related
expenses.
· Underlying basic EPS increased by 18% to 43.2p, whilst statutory
basic EPS also increased by 18% to 37.7p.Strong cash performance, with
underlying cash conversion of 110%, reflecting continued growth in
subscription revenue and good working capital management.
· Robust balance sheet, with £1.0bn of cash and available liquidity;
net debt to underlying EBITDA of 1.7x.
Shareholder returns
· Proposed final dividend of 14.4p, increasing the full year dividend
by 7% to 21.85p, in line with our progressive policy.
· Share buyback programme of up to £300m announced separately today,
reflecting Sage's strong cash generation, robust financial position, and the
Board's confidence in Sage's future prospects.
Strategic and operational highlights
· Underlying annualised recurring revenue (ARR) up 11% to £2,574m,
with growth across all regions balanced between new and existing customers.
· Renewal rate by value of 101% (FY24: 101%), reflecting strong
retention rates and a good level of sales to existing customers.
· Sage Business Cloud revenue increased by 13% to £2,083m (FY24:
£1,837m), including cloud native revenue growth of 23% to £885m (FY24:
£718m).
· Subscription penetration increased to 83% (FY24: 82%) driven by
growth in subscription revenue of 12% to £2,093m (FY24: £1,876m).
· Strong growth across our cloud products, particularly Sage Intacct,
supported by continued investment in our customer proposition and go-to-market
capabilities.
· Leveraging the Sage Platform to enhance our portfolio of integrated
solutions across finance, HR and payroll, supported by the acquisitions of
ForceManager, Fyle and Criterion iii (#_edn3) .
· Scaled the availability and usage of Sage Copilot across core
products including Sage Intacct, Sage X3, Sage Accounting and Sage 50, while
introducing intelligent AI agents across our platform.
Outlook
In FY26, we expect organic total revenue growth to be 9% or above. Operating
margins are expected to continue trending upwards in FY26 and beyond, as we
focus on efficiently scaling the Group.
About Sage
Sage exists to knock down barriers so everyone can thrive, starting with the
millions of small and mid-sized businesses (SMBs) served by us, our partners
and accountants. Customers trust our finance, HR and payroll software to make
work and money flow. By digitalising business processes and relationships with
customers, suppliers, employees, banks and governments, our AI-powered
platform connects SMBs, removing friction and delivering insights. Knocking
down barriers also means we use our time, technology and experience to tackle
digital inequality, economic inequality and the climate crisis.
Enquiries: Sage: +44 (0) 7341 479956 FGS Global: +44 (0) 20 7251 3801
James Sandford, Investor Relations Conor McClafferty
David Ginivan, Corporate PR Sophia Johnston
A presentation for investors and analysts will be held at 8.30am UK time. The
webcast can be accessed via sage.com/investors or directly via the following
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Business Review
Sage performed well in FY25, with continued growth across all regions, in line
with expectations. Disciplined cost management together with operating
efficiencies supported strong operating profit and margin expansion, driving
double-digit growth in earnings per share and robust cash flows.
Overview of results
The Group increased underlying total revenue by 10% to £2,513m (FY24:
£2,290m), with all regions contributing to growth. In North America, revenue
grew by 12%, with a strong performance from Sage Intacct together with
continued growth in Sage 200 and Sage 50. In the UKIA iv (#_edn4) region,
revenue increased by 9%, driven by Sage Intacct together with cloud solutions
for small businesses including Sage 50. In Europe, revenue increased by 7%,
with growth across our accounting, payroll and HR solutions.
Our aim is to efficiently grow revenues across all products and services, by
attracting new customers and delivering more value to existing customers. Sage
Business Cloud, comprising our cloud native v (#_edn5) and cloud
connected vi (#_edn6) solutions, helps customers benefit from a growing range
of cloud and AI-powered services via the Sage Platform, leading to deeper
customer relationships and higher lifetime values.
As a result, Sage Business Cloud total revenue increased by 13% to £2,083m
(FY24: £1,837m), driven by growth in cloud native revenue of 23% to
£885m (FY24: £718m) primarily through new customer acquisition, and by
growth in cloud connected revenue from both existing and new customers.
Underlying recurring revenue increased by 10% to £2,436m (FY24: £2,215m),
with software subscription revenue up by 12% to £2,093m (FY24: £1,876m)
leading to subscription penetration of 83% (FY24: 82%). As a result, 97% of
the Group's revenue is recurring.
On an organic basis, total revenue grew by 9% to £2,506m (FY24: £2,296m),
whilst recurring revenue grew by 9% to £2,429m (FY24: £2,221m).
ARR growth
ARR increased by 11% to £2,574m (FY24: £2,329m) on an underlying basis,
reflecting growth balanced between new and existing customers. On an organic
basis, ARR increased by 10% to £2,560m (FY24: £2,329m).
Renewal rate by value of 101% (FY24: 101%) reflects strong retention rates and
a good level of sales to existing customers, including pricing and customer
add-ons. In total, Sage added £200m of ARR through new customer acquisition
on an organic basis during FY25, up from £185m vii (#_edn7) a year earlier.
Performance by region
North America FY25 FY24 Change Organic change
US £997m £891m 12% 11%
Canada £141m £127m 11% 11%
Underlying total revenue £1,138m £1,018m 12% 11%
In North America, underlying total revenue increased by 12% to £1,138m, with
growth across Sage's key accounting solutions, particularly among mid-sized
businesses. Recurring revenue grew by 12% to £1,110m (FY24: £994m), while
subscription penetration increased to 82%, up from 81% in the prior year.
In the US, total revenue increased by 12% to £997m. Sage Intacct, which now
represents over 45% of US revenue, grew by 23% to £461m (FY24: £374m),
driven by strength across key industry verticals, particularly construction
and real estate, financial services and not-for-profit, together with an
enhanced commercial proposition through the expansion of suites and
introduction of multi-year customer contracts. Revenue was also driven by
growth in Sage 200, with good levels of upsell to existing customers and
higher pricing, together with further growth in Sage X3 and Sage 50.
In Canada, total revenue grew by 11% to £141m, with good performance from
Sage Intacct driven by new customers, together with growth in Sage 50. In
addition, Sage HR continued to gain momentum, particularly through cross-sell
to existing customers.
Adjusting for the acquisitions of Fyle in FY25 and Anvyl in FY24, organic
total revenue grew by 11% in the US, and by 11% in the North America region as
a whole.
UKIA FY25 FY24 Change Organic change
UK & Ireland £554m £505m 10% 10%
Africa & APAC £175m £163m 7% 7%
Underlying total revenue £729m £668m 9% 9%
In the UKIA region, underlying total revenue increased by 9% to £729m, with
further strength across Sage's accounting, HR and payroll solutions. Recurring
revenue also grew by 9% to £714m (FY24: £653m), while subscription
penetration was 89%, in line with the prior year.
In the UK & Ireland, total revenue grew by 10% to £554m. Sage Intacct
continued to scale rapidly, driven by accelerating new customer acquisition.
Sage 50 also contributed strongly, together with Sage 200, supported by a
strong renewal rate and higher pricing. In addition, Sage's cloud native
solutions for small businesses, including Sage Accounting, Sage Payroll and
Sage HR delivered good levels of growth. The recent launch of Sage Copilot
supported the strong performance of both Sage 50 and Sage Accounting. Revenue
was also driven through the continued growth of Sage for Accountants.
In Africa & APAC, total revenue grew by 7% to £175m, with continued
growth in Sage Accounting and Sage Payroll, driven by new customer acquisition
and higher pricing, together with a strong performance from Sage Intacct. Sage
X3 and local products in the Sage 50 franchise also continued to contribute
to growth.
Europe FY25 FY24 Change Organic Change
France £324m £306m 6% 6%
Central Europe £155m £146m 6% 6%
Iberia £167m £152m 10% 7%
Underlying total revenue £646m £604m 7% 6%
Europe achieved underlying total revenue growth of 7% to £646m, reflecting a
strong performance particularly in Sage 200, Sage X3, HR and payroll
solutions. Recurring revenue grew by 8% to £612m (FY24: £568m), while
subscription penetration increased to 79%, up from 76% in the prior year.
In France, total revenue grew by 6% to £324m driven by accounting solutions.
Sage X3 was a significant contributor of growth, with continued strong
customer demand, while Sage 200 also performed well. In addition, Sage Intacct
continued to see early traction as the solution starts to scale.
Central Europe achieved a total revenue increase of 6% to £155m. HR and
payroll solutions, which represent almost half the region's revenue, grew
strongly, driven by upsell to existing customers together with new customer
wins. Growth was also driven by Sage 200, mainly through sales to existing
customers.
In Iberia, total revenue grew by 10% to £167m, reflecting strength across
Sage 200 and Sage 50 driven by renewals, higher pricing and new customers.
Growth was also driven by ForceManager, a mobile workforce management solution
acquired in October 2024. In addition, Iberia achieved good levels of growth
from accountants, following the recent introduction of Sage for Accountants
into the region.
Adjusting for the impact of the ForceManager acquisition, organic total
revenue grew by 7% in Iberia, and by 6% in the Europe region as a whole.
Strategic progress
Our strategic framework for growth includes three key focus areas: connecting
SMBs through our trusted and thriving network, growing by winning new
customers and delighting existing ones, and delivering productivity and
insights driven by AI. Our progress in each of these areas is outlined below.
Connect
The Sage Platform is the foundation for our trusted and thriving network for
SMBs, connecting products, partners and customers in an intelligent ecosystem.
As we connect more customers to the platform, we are expanding the scale and
scope of our services, delivering greater value and transforming customer
workflows. During the year we significantly grew services such as accounts
payable and accounts receivable automation, enhanced our expense management
capabilities through the acquisition of Fyle, drove growth through payroll and
HR, and increased revenue from payment services - helping SMBs get paid, pay
suppliers, pay employees and manage capital. In October 2025 we strengthened
our human capital management (HCM) capabilities with the acquisition of
Criterion, a unified cloud HR, payroll and talent engagement solutions
provider, enhancing our offering to mid-market businesses. We are also
innovating to expand our reach, delivering a rapidly growing set of embedded
accounting and tax services to fintech and other partners such as Tide, Monzo
and NatWest.
Grow
Our aim is to expand revenues across all products and services, with a focus
on the greatest growth opportunities. We continue to scale Sage Intacct, our
flagship solution for mid-sized businesses, which grew strongly in the US,
expanded rapidly in the UK, Canada and South Africa, and gained early traction
in France and Germany. Reflecting this progress, Sage Intacct grew ARR by over
20% in the US and by around 50% outside the US. We also drove value through
the rollout of specialist suites across the construction, not-for-profit,
software, financial services, professional services, healthcare and
hospitality verticals. For small businesses and accountants, we are focused on
augmenting our proposition through product and package enhancements, including
in Sage Accounting and Sage 50, driving strong 'in-life' growth and new
customer acquisition particularly in the UKIA region. In Europe, Sage Active
growth accelerated following enhancements including the integration of
AI-driven insights and automation.
Deliver
Our ambition is to create the world's most trusted and thriving network for
SMBs, powered by AI. During the year, we continued to scale Sage Copilot, our
generative AI-powered assistant, in availability and usage across core
products including Sage Intacct, Sage X3, Sage Accounting, Sage 50, Sage for
Accountants, and Sage Active. With strong feedback, Sage Copilot is driving
value for customers, helping them get paid faster and save time on manual
tasks. We are further developing Sage Copilot with the introduction of
agents to automate tasks across compliance, reconciliation, accounts payable
and tax, allowing customers to focus on higher-value strategic work. These
include the Making Tax Digital (MTD) for Income Tax Agent to support
accountants in the UK, and the Finance Intelligence Agent to support Sage
Intacct customers in the US and the UK. We are also leveraging AI to drive
productivity internally, with benefits across business areas including in
engineering and customer support.
Sustainability and Society
Sage's Sustainability and Society strategy underscores our commitment to serve
all our stakeholders, including our colleagues and communities. We have made
good progress across our three pillars - Protect the Planet, Tech for Good and
Human by Design - and embedded sustainability across our operations, products
and culture. We launched the Sage Impact Entrepreneurship Programme, which was
completed by more than 50 businesses in FY25, helping them access a
combination of funding, mentorship, training and products. In July, Sage
Foundation celebrated ten years of impact, having raised over US$5m and
facilitated 1.4 million volunteering hours over the last decade for local
communities and causes.
In FY25, Sage was recognised in Newsweek's World's Greenest Companies, TIME
and Statista's World's Most Sustainable Companies, and ranked in the top 30 of
the Financial Times Europe Climate Leaders list. We maintained our 'Gold'
rating from EcoVadis and our 'AAA' ESG rating from MSCI, and we were awarded
CDP A List status for Climate Leadership and Supplier Engagement. We also won
the edie 2025 award for Sustainability Reporting & Communications.
Forthcoming senior management change
On 31 March 2026, after almost five years at Sage, Walid Abu-Hadba will step
down as Chief Product Officer and take on a new role as technology advisor to
the Group in a part-time capacity. The search for a successor is under way.
Financial Review
The financial review provides a summary of the Group's results on a statutory
and underlying basis, alongside its organic performance. Underlying measures
allow management and investors to understand the Group's financial performance
adjusted for the impact of foreign exchange movements and recurring and
non-recurring items, while organic measures also adjust for the impact of
acquisitions and disposals viii (#_edn8) .
Statutory and underlying financial results
Financial results Statutory Underlying
FY25 FY24 Change FY25 FY24 Change
North America £1,138m £1,052m +8% £1,138m £1,018m 12%
UKIA £729m £670m +9% £729m £668m 9%
Europe £646m £610m +6% £646m £604m 7%
Total revenue £2,513m £2,332m +8% £2,513m £2,290m +10%
Operating profit £530m £452m +17% £600m £513m +17%
% Operating profit margin 21.1% 19.4% +1.7 ppts 23.9% 22.4% +1.5 ppts
Profit before tax £484m £426m +14% £555m £486m +14%
Profit after tax £369m £323m +14% £423m £370m +14%
Basic EPS 37.7p 32.1p +18% 43.2p 36.7p +18%
The Group achieved statutory and underlying total revenue of £2,513m in FY25.
Statutory total revenue increased by 8%, reflecting underlying total revenue
growth of 10% offset by a 2-percentage point foreign exchange headwind, with
sterling strengthening against key currencies.
Statutory operating profit increased by 17% to £530m, reflecting a 17%
increase in underlying operating profit to £600m, together with a £7m
decrease in recurring and non-recurring items ix (#_edn9) , mainly relating
to lower acquisition-related expenses.
Statutory and underlying basic EPS increased by 18%, to 37.7p and 43.2p
respectively, mainly reflecting higher underlying profit, with an increase in
net finance costs offset by a reduction in the weighted average number of
shares as a result of recent share buybacks.
Revenue - underlying and organic reconciliation to statutory
Total revenue bridge FY25 FY24 Change
Statutory £2,513m £2,332m +8%
Impact of FX - (£42m)
Underlying £2,513m £2,290m +10%
Disposals - -
Acquisitions (£7m) £6m
Organic £2,506m £2,296m +9%
Statutory and underlying revenue was £2,513m in FY25. Underlying revenue in
FY24 of £2,290m reflects statutory revenue of £2,332m retranslated at
current year exchange rates, resulting in a foreign exchange headwind of
£42m. Organic revenue in FY25 was £2,506m, reflecting underlying revenue of
£2,513m adjusted for £5m of revenue from the acquisition of ForceManager and
£2m from the acquisition of Fyle during the year. Organic revenue in FY24 of
£2,296m reflects underlying revenue of £2,290m, adjusted for £6m of revenue
from Anvyl and Infineo, which were acquired at the end of FY24.
Operating profit
The Group increased underlying operating profit by 17% to £600m (FY24:
£513m), resulting in a strong increase in underlying operating margin of
150bps to 23.9% (FY24: 22.4%). This was driven by revenue growth and operating
efficiencies, with disciplined cost management supporting ongoing investment.
On an organic basis, adjusting for the impact of acquisitions in FY24 and
FY25, operating profit increased by 16% to £600m (FY24: £515m) while margin
was in line with underlying.
Operating profit - underlying and organic reconciliation to statutory
Operating profit bridge FY25 FY24
Operating profit Operating margin Operating profit Operating margin
Statutory £530m 21.1% £452m 19.4%
Recurring items x (#_edn10) £73m £82m
Non-recurring items:
· Reversal of property restructuring (£2m) -
· Reversal of employee-related costs - (£3m)
· Reversal of restructuring costs (£1m) (£2m)
Impact of FX xi (#_edn11) - (£16m)
Underlying £600m 23.9% £513m 22.4%
Disposals - - - -
Acquisitions - - £2m -
Organic £600m 23.9% £515m 22.4%
The Group achieved a statutory operating profit in FY25 of £530m. Underlying
and organic operating profit of £600m in FY25 reflects statutory operating
profit adjusted for recurring and non-recurring items.
Recurring items of £73m (FY24: £82m) comprise £42m of amortisation of
acquisition-related intangibles (FY24: £48m) and £31m of M&A-related
charges (FY24: £34m). Non-recurring items in FY25 comprise a £2m reversal of
property restructuring costs (FY24: nil) and a £1m reversal of other
restructuring costs (FY24: £2m). Non-recurring items in FY24 also comprised a
£3m reversal of employee-related charges for French payroll taxes relating to
previous years. Together, recurring and non-recurring items reduced by £7m
compared to the prior year.
In addition, the retranslation of FY24 underlying and organic operating profit
at current year exchange rates has resulted in an operating profit headwind of
£16m. This has led to a 30-basis point margin headwind from foreign exchange
to 22.4% (FY24 underlying as reported: 22.7%).
Organic operating profit of £515m in FY24 reflects underlying operating
profit of £513m adjusted for £2m of operating profit from Anvyl and Infineo,
which were acquired at the end of FY24.
Underlying EBITDA
Underlying EBITDA was £694m (FY24: £605m) representing a margin of 27.6%.
The increase in underlying EBITDA principally reflects the growth in
underlying operating profit.
FY25 FY24 FY25 Margin
Underlying operating profit £600m £513m 23.9%
Depreciation & amortisation £48m £47m
Share-based payments £46m £45m
Underlying EBITDA £694m £605m 27.6%
Net finance cost
The underlying net finance cost for FY25 increased to £45m (FY24: £27m)
mainly reflecting higher interest expense following the new debt issuance (see
page 9), together with lower interest income on cash and cash equivalents
during the year. The statutory net finance cost of £46m (FY24: £26m) is
broadly in line with the underlying net finance cost.
Taxation
The underlying tax expense for FY25 was £132m (FY24: £116m), resulting in an
underlying tax rate of 24% (FY24: 24%). The statutory income tax expense for
FY25 was £115m (FY24: £103m), resulting in a statutory tax rate of 24%
(FY24: 24%).
Earnings per share (EPS)
FY25 FY24 Change
Statutory basic EPS 37.7p 32.1p +18%
Recurring items 5.7p 6.3p
Non-recurring items (0.2)p (0.5)p
Impact of foreign exchange - (1.2)p
Underlying basic EPS 43.2p 36.7p +18%
Underlying basic EPS and statutory basic EPS increased by 18% to 43.2p and
37.7p respectively, mainly reflecting higher underlying operating profit.
Cash flow
Sage remains highly cash generative with underlying cash flow from operations
increasing by 2% to £660m (FY24: £649m), representing underlying cash
conversion of 110% (FY24: 123%). This strong cash performance reflects
growth in subscription revenue and strength in receivables collection, partly
offset by increased capital expenditure due to workplace investment together
with the timing of certain payments to third parties. Free cash flow of £517m
(FY24: £524m) reflects robust underlying cash conversion offset by higher net
interest and income tax.
Cash flow APMs FY25 FY24 (as reported)
Underlying operating profit £600m £529m
Depreciation, amortisation and non-cash items in profit £44m £44m
Share-based payments £46m £45m
Net changes in working capital £26m £55m
Net capital expenditure (£56m) (£24m)
Underlying cash flow from operations £660m £649m
Underlying cash conversion % 110% 123%
Non-recurring cash items (£8m) (£5m)
Net interest paid (£34m) (£25m)
Income tax paid (£101m) (£91m)
Profit and loss foreign exchange movements - (£4m)
Free cash flow £517m £524m
Statutory reconciliation of cash flow from operations FY25 FY24 (as reported)
Statutory cash flow from operations £675m £625m
Recurring and non-recurring items £41m £44m
Net capital expenditure (£56m) (£24m)
Other adjustments including foreign exchange translations - £4m
Underlying cash flow from operations £660m £649m
Net debt and liquidity
Group net debt was £1,189m at 30 September 2025 (30 September 2024: £738m),
comprising cash and cash equivalents of £390m (30 September 2024: £508m) and
total debt of £1,579m (30 September 2024: £1,246m). The Group had £1,020m
of cash and available liquidity at 30 September 2025 (30 September 2024:
£1,138m).
The increase in net debt in the period is summarised in the table below:
FY25 FY24 (as reported)
Net debt at 1 October (£738m) (£561m)
Free cash flow £517m £524m
New leases (£28m) (£26m)
Acquisition of businesses (£87m) (£34m)
M&A and equity investments (£33m) (£41m)
Dividends paid (£207m) (£199m)
Share buyback (£605m) (£348m)
Purchase of shares by Employee Benefit Trust - (£55m)
FX movement and other (£8m) £2m
Net debt at 30 September (£1,189m) (£738m)
The Group's debt is sourced from sterling and euro denominated notes, together
with a syndicated multicurrency revolving credit facility (RCF).
The Group's notes include £300m 12-year notes issued in March 2025 with a
coupon of 5.625%, and €500m 5-year notes issued in February 2023 with a
coupon of 3.82%, under the Group's Euro Medium Term Note programme. Sage's
other notes comprise £400m 12-year notes issued in February 2022 with a
coupon of 2.875%, and £350m 10-year notes issued in February 2021 with a
coupon of 1.625%.
The Group's RCF of £630m expires in December 2029 and was undrawn at 30
September 2025 (FY24: undrawn). Sage has an investment grade issuer rating
assigned by Standard and Poor's of BBB+ (stable outlook).
Capital allocation
Sage's disciplined capital allocation policy is focused on accelerating
strategic execution through organic and inorganic investment and delivering
shareholder returns. During FY25 Sage completed the acquisition of Tritium
Software, the developer of ForceManager (now branded Sage Sales Management), a
mobile workforce management solution for field-based sales teams, and Fyle, an
AI-enabled expense management platform that transforms how SMBs track and
manage expenses.
Sage has a progressive dividend policy, intending to grow the dividend over
time while considering the future capital requirements of the Group. The final
dividend proposed by the Board is 14.4p per share, taking the total dividend
for the year to 21.85p, up 7% compared to the prior year (FY24: 20.45p).
The Group also considers returning surplus capital to shareholders. On 30 July
2025, Sage completed a share buyback programme, commenced on 20 November 2024
and extended on 15 May 2025, under which a total of 48.2m shares were
purchased for an aggregate consideration of £600m and subsequently cancelled.
Alongside these results, we have announced a further share buyback programme
of up to £300m, reflecting Sage's strong cash generation, robust financial
position, and the Board's confidence in the Group's future prospects. Sage
continues to have considerable financial flexibility to drive the execution of
its growth strategy.
FY25 FY24 (as reported)
Net debt £1,189m £738m
Underlying EBITDA (last twelve months) £694m £622m
Net debt/underlying EBITDA Ratio 1.7x 1.2x
The Group's underlying EBITDA over the last 12 months was £694m, resulting in
a net debt to underlying EBITDA leverage ratio of 1.7x, up from 1.2x in the
prior year. Sage intends to operate in a broad range of 1x to 2x net debt to
underlying EBITDA over the medium term, with flexibility to move outside this
range as business needs require.
Return on capital employed (ROCE) for FY25 was 31% (FY24 as reported: 26%). A
reconciliation of ROCE to our reported measures is set out in Appendix 1 on
page 12.
Foreign exchange
The Group does not hedge foreign currency profit and loss translation exposure
and the statutory results are therefore impacted by movements in exchange
rates. The average rates used to translate the consolidated income statement
and to normalise prior year underlying and organic figures are as follows:
Average exchange rates (equal to GBP) FY25 FY24 Change
Euro (€) 1.18 1.17 +1%
US Dollar ($) 1.31 1.27 +3%
Canadian Dollar (C$) 1.83 1.73 +6%
South African Rand (ZAR) 23.61 23.50 +0%
Appendix 1 - Alternative Performance Measures
Alternative Performance Measures are used by the Group to understand and
manage performance. These are not defined under International Financial
Reporting Standards (IFRS) or UK-adopted International Accounting Standards
(UK-IFRS) and are not intended to be a substitute for any IFRS or UK-IFRS
measures of performance but have been included as management considers them to
be important measures, alongside the comparable GAAP financial measures, in
assessing underlying performance. Wherever appropriate and practical, we
provide reconciliations to relevant GAAP measures. The table below sets out
the basis of calculation of the Alternative Performance Measures and the
rationale for their use.
MEASURE DESCRIPTION RATIONALE
Underlying (revenue and profit) measures Underlying measures are adjusted to exclude items which in management's Underlying measures allow management and investors to compare performance
judgement need to be disclosed separately by virtue of their size, nature or without the effects of foreign exchange movements or recurring or
frequency to aid understanding of the performance for the year or non-recurring items.
comparability between periods:
By including part-period contributions from acquisitions, discontinued
· Recurring items include purchase price adjustments including operations, disposals and assets held for sale of standalone businesses in the
amortisation of acquired intangible assets and adjustments made to reduce current and/or prior periods, the impact of M&A decisions on earnings per
deferred income arising on acquisitions, acquisition-related items and share growth can be evaluated.
unhedged FX on intercompany balances; and
· Non-recurring items that management judge to be one-off or
non-operational, such as gains and losses on the disposal of assets,
impairment charges and reversals, and restructuring related costs.
Recurring items are adjusted each period irrespective of materiality to ensure
consistent treatment.
Underlying basic EPS is also adjusted for the tax impact of recurring and
non-recurring items.
All prior period underlying measures (revenue and profit) are retranslated at
the current year exchange rates to neutralise the effect of currency
fluctuations.
Organic (revenue and profit) measures In addition to the adjustments made for Underlying measures, Organic measures: Organic measures allow management and investors to understand the
like‑for‑like revenue and current period margin performance of the
· Exclude the contribution from discontinued operations, disposals and continuing business.
assets held for sale of standalone businesses in the current and prior period;
and
· Exclude the contribution from acquired businesses until the year
following the year of acquisition; and
· Adjust the comparative period to present prior period acquired
businesses as if they had been part of the Group throughout the prior period.
Acquisitions and disposals where the revenue and contribution impact would be
immaterial are not adjusted.
Underlying Cash Flow from Operations Underlying Cash Flow from Operations is Underlying Operating Profit adjusted To show the cash flow generated by the operations and calculate underlying
for non-cash items, net capital expenditure (excluding business combinations cash conversion.
and similar items) and changes in working capital.
Underlying Cash Conversion Underlying Cash Flow from Operations divided by Underlying (as reported) Cash conversion informs management and investors about the cash operating
Operating Profit. cycle of the business and how efficiently operating profit is converted into
cash.
Underlying EBITDA Underlying EBITDA is Underlying Operating Profit excluding underlying To calculate the Net Debt to Underlying EBITDA leverage ratio and to show
depreciation, amortisation and share-based payments. profitability before the impact of major non-cash charges.
Underlying depreciation and amortisation is the statutory equivalent measure,
adjusted for the amortisation of acquired intangibles. Underlying share-based
payments is the statutory equivalent measure, adjusted for M&A-related
share-based payment charges included within other M&A activity related
items.
Annualised recurring revenue Annualised recurring revenue ("ARR") is the normalised recurring revenue in ARR represents the annualised value of the recurring revenue base that is
the last month of the reporting period, adjusted consistently period to expected to be carried into future periods, and its growth is a
period, multiplied by twelve. Adjustments to normalise reported recurring forward‑looking indicator of reporting recurring revenue growth.
revenue involve adjusting for certain components (such as non‑refundable
contract sign‑up fees) to ensure the measure reflects that part of the
revenue base which (subject to ongoing use and renewal) can reasonably be
expected to repeat in future periods.
Renewal Rate by Value The ARR from renewals, migrations, upsell and cross-sell of active customers As an indicator of our ability to retain and generate additional revenue from
at the start of the year, divided by the opening ARR for the year. our existing customer base through up and cross sell.
Free Cash Flow Free Cash Flow is Underlying Cash Flow from Operations minus net interest To measure the cash generated by the operating activities during the period
paid, derivative financial instruments and income tax paid, and adjusted for that is available to repay debt, undertake acquisitions or distribute to
non-recurring cash items (which excludes net proceeds on disposals of shareholders.
subsidiaries) and profit and loss foreign exchange movements.
% Subscription Penetration Underlying software subscription revenue as a percentage of underlying total To measure the migration of our customer base from licence and maintenance to
revenue. a subscription relationship.
Net debt Net debt is cash and cash equivalents less current and non-current borrowings. To calculate the Net Debt to Underlying EBITDA leverage ratio and an indicator
of our indebtedness.
Return on Capital Employed (ROCE) ROCE is calculated as underlying Operating Profit, minus amortisation of As an indicator of the financial return on the capital invested in the
acquired intangibles, the result being divided by capital employed, which is Company. ROCE is used as an underpin in the FY23, FY24 and FY25 PSP awards.
the average (of the opening and closing balance for the period) total net
assets excluding net debt, derivative financial instruments, provisions for
non-recurring costs, financial liability for the purchase of own shares and
tax assets or liabilities. A reconciliation of ROCE to our reported measures
is set out in the table below.
Reconciliation of Return on Capital Employed (ROCE) FY25 FY24
(as reported)
Underlying operating profit net of amortisation of acquired intangibles £558m £481m
Net assets less borrowings and cash £1,909m £1,832m
Less:
· Derivative financial instruments (£32m) (£17m)
· Provisions for non-recurring costs £6m £16m
· Financial liability for the purchase of own shares £8m £4m
· Tax assets or liabilities (£49m) (£54m)
Adjusted net assets £1,842m £1,781m
Average adjusted net assets £1,811m £1,870m
Return on capital employed 31% 26%
Consolidated income statement
For the year ended 30 September 2025
Note 2025 2024
£m
£m
Revenue 2 2,513 2,332
Cost of sales (183) (168)
Gross profit 2,330 2,164
Selling and administrative expenses (1,800) (1,712)
Operating profit 2 530 452
Finance income 12 19
Finance costs (58) (45)
Profit before income tax 484 426
Income tax expense 4 (115) (103)
Profit for the year 369 323
Profit attributable to: 369 323
Owners of the parent
Earnings per share attributable to the owners of the parent (pence)
Basic 6 37.74p 32.10p
Diluted 6 37.16p 31.55p
All operations in the year relate to continuing operations.
The notes on pages 19 to 35 form an integral part of these condensed
consolidated financial statements.
Consolidated statement of comprehensive income
For the year ended 30 September 2025
2025 2024
£m £m
Profit for the year 369 323
Items of other comprehensive income that will not be reclassified to profit or
loss, net of tax:
Actuarial gain/(loss) on post-employment benefit obligations 1 (2)
Fair value reassessment of equity investments (2) -
(1) (2)
Items of other comprehensive income that may be reclassified to profit or
loss, net of tax:
Exchange differences on translating foreign operations and net investment 10 (101)
hedges
Changes in fair value of foreign currency basis of hedge relationships (2) -
Amortisation of foreign currency basis of hedge relationships 1 -
9 (101)
Other comprehensive income/(expense) for the year, net of tax 8 (103)
Total comprehensive income for the year 377 220
Total comprehensive income for the year attributable to:
Owners of the parent 377 220
Consolidated balance sheet
As at 30 September 2025
Note 2025 2024 (Restated*)
£m £m
Non-current assets
Goodwill 7 2,213 2,122
Other intangible assets 7 212 228
Property, plant and equipment 7 144 108
Equity investments 4 6
Trade and other receivables 144 137
Deferred income tax assets 101 81
Derivative financial instruments 32 29
2,850 2,711
Current assets
Trade and other receivables 471 404
Current income tax asset 2 16
Cash and cash equivalents 9 390 508
863 928
Total assets 3,713 3,639
Current liabilities
Trade and other payables (433) (405)
Current income tax liabilities (39) (26)
Borrowings 9 (17) (15)
Provisions (21) (22)
Deferred income (845) (758)
(1,355) (1,226)
Non-current liabilities
Borrowings 9 (1,562) (1,231)
Post-employment benefits (25) (23)
Deferred income tax liabilities (15) (19)
Provisions (23) (25)
Trade and other payables (8) (3)
Deferred income (5) (6)
Derivative financial instruments - (13)
(1,638) (1,320)
Total liabilities (2,993) (2,546)
Net assets 720 1,093
Equity attributable to owners of the parent
Ordinary shares 8 11 11
Share premium 8 548 548
Other reserves 8 (369) (429)
Retained earnings 530 963
Total equity 720 1,093
*Adjusted for finalisation of the fair value of assets acquired and
liabilities assumed in the acquisition of Infineo SAS (see note 11).Other
reserves and retained earnings have been restated to present the treasury
share reserve and capital redemption reserve within other reserves.
Consolidated statement of changes in equity
For the year ended 30 September 2025
Ordinary shares Share premium Other reserves Retained earnings Total
£m
£m
£m
£m
equity
£m
At 1 October 2024 11 548 (429) 963 1,093
Adjustment on initial application of IFRS 9 hedge accounting - - 1 (1) -
Adjusted opening shareholders' equity 11 548 (428) 962 1,093
Profit for the year - - - 369 369
Other comprehensive income/(expense), net of tax
Actuarial gain on post-employment benefit obligations - - - 1 1
Fair value reassessment of equity investments - - - (2) (2)
Exchange differences on translating foreign operations and net investment - - 10 - 10
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (2) - (2)
Amortisation of foreign currency basis of hedge relationships - - 1 - 1
Total comprehensive income - - 9 368 377
for the year ended 30 September 2025
Transactions with owners
Employee share option scheme - value of employee services including deferred - - - 57 57
tax
Vesting of share awards and exercise of share options - - 50 (41) 9
Share buyback programme - - - (609) (609)
Dividends paid to owners of the parent - - - (207) (207)
Total transactions with owners - - 50 (800) (750)
for the year ended 30 September 2025
At 30 September 2025 11 548 (369) 530 720
Consolidated statement of changes in equity
For the year ended 30 September 2024
Ordinary shares Share premium Other reserves (Restated*) Retained earnings (Restated*) Total
£m
£m
£m
£m
equity
£m
At 1 October 2023 12 548 (324) 1,171 1,407
Profit for the year - - - 323 323
Other comprehensive expense
Actuarial loss on post-employment benefit obligations - - - (2) (2)
Exchange differences on translating foreign operations and net investment - - (101) - (101)
hedges
Total comprehensive (expense)/income - - (101) 321 220
for the year ended 30 September 2024
Transactions with owners
Employee share option scheme - value of employee services including deferred - - - 62 62
tax
Vesting of share awards and exercise of share options - - 50 (41) 9
Cancellation of ordinary shares (1) - 1 - -
Share buyback programme - - - (351) (351)
Purchase of shares by Employee Benefit Trust - - (55) - (55)
Dividends paid to owners of the parent - - - (199) (199)
Total transactions with owners (1) - (4) (529) (534)
for the year ended 30 September 2024
At 30 September 2024 11 548 (429) 963 1,093
*Other reserves and retained earnings have been restated to present the
treasury share reserve and capital redemption reserve within other reserves.
Consolidated statement of cash flows
For the year ended 30 September 2025
Note 2025 2024
£m £m
Cash flows from operating activities
Cash generated from continuing operations 675 625
Interest paid (46) (43)
Income tax paid (101) (91)
Net cash generated from operating activities 528 491
Cash flows from investing activities
Purchase of equity investment - (2)
Acquisition of subsidiaries, net of cash acquired 11 (82) (30)
Purchases of intangible assets 7 (18) (18)
Purchases of property, plant and equipment 7 (41) (19)
Proceeds from disposals of property, plant and equipment 7 1 9
Interest received 13 19
Net cash used in investing activities (127) (41)
Cash flows from financing activities
Proceeds from borrowings 9 297 -
Repayments of borrowings 9 (2) -
Capital element of lease payments 9 (17) (16)
Borrowing costs (2) (1)
Receipt of lease incentive 6 -
Share buyback programme (605) (348)
Proceeds from issuance of treasury shares 9 9
Purchase of shares by Employee Benefit Trust 8 - (55)
Dividends paid to owners of the parent 5 (207) (199)
Net cash used in financing activities (521) (610)
Net decrease in cash and cash equivalents (before exchange rate movement) (120) (160)
Effects of exchange rate movement 9 2 (28)
Net decrease in cash and cash equivalents (118) (188)
Cash and cash equivalents at 1 October 9 508 696
Cash and cash equivalents at 30 September 9 390 508
Notes to the financial information
For the year ended 30 September 2025
1. Group accounting policies
Basis of preparation
The Sage Group plc. (the "Company") and its subsidiaries (together the
"Group") is a leader in accounting, financial, HR and payroll technology for
small and mid-sized businesses. The Company is incorporated and registered in
the United Kingdom as a public limited company limited by shares.
In conformity with the requirements of the Companies Act 2006, these condensed
consolidated financial statements have been prepared based on International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standard Board (IASB) and UK-adopted International Accounting Standards
(UK-IFRS). These condensed consolidated financial statements have been
prepared on a going concern basis.
These condensed consolidated financial statements do not constitute statutory
financial statements within the meaning of Section 434 of the Companies Act
2006. The annual financial statements are included in the Annual Report and
Accounts for the year ended 30 September 2025 and will be delivered to the
Registrar of Companies in due course. Annual financial statements for the year
ended 30 September 2024 have been delivered to the Registrar of Companies. The
auditor's reports on the annual financial statements for the years ended 30
September 2025 and 30 September 2024 were both unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain statements under
section 498 (2) and (3) of the Companies Act 2006.
Except as set out below the accounting policies used in these condensed
consolidated financial statements are consistent with those applied in the
annual financial statements for the year ended 30 September 2024.
Additionally, in the current year, treasury share reserve and capital
redemption reserve have been presented separately within other reserves
(earlier combined within retained earnings). This change provides visibility
and greater clarity to users of the consolidated financial statements.
All figures presented are rounded to the nearest £m, unless otherwise stated.
Change in accounting policies
As at 1 October 2024 the Group elected to apply the hedge accounting
requirements in IFRS 9 "Financial Instruments" instead of those in IAS 39
"Financial Instruments: Recognition and Measurement". This standard introduces
simplified hedge accounting through closer alignment with the entity's risk
management methodology.
All existing hedge relationships were regarded as continuing hedge
relationships. All such designated hedge relationships under IAS 39 as at 30
September 2024 met the criteria for hedge accounting under IFRS 9 as the
Group's risk management strategies and hedge documentation were aligned to the
new standard.
The Group has adopted the modified transition approach and therefore adjusted
opening retained earnings and other reserve balances for the impact of
adopting IFRS 9 hedge accounting and has not restated prior period
comparatives.
The impact on the year ended 30 September 2025 is not material and the
transition did not result in any changes in the measurement or classification
of financial instruments as at 1 October 2024.
Segment information
In accordance with IFRS 8, "Operating Segments", information for the Group's
operating segments has been derived using the information used by the Chief
Operating Decision Maker ("CODM"). The Group's Executive Leadership Team
("ELT") has been identified as the CODM, in accordance with their designated
responsibility for the allocation of resources to operating segments and
assessing their performance through the Monthly Performance Reviews. The ELT
uses organic and underlying data to monitor business performance. Operating
segments are reported in a manner which is consistent with the operating
segments produced for internal management reporting.
The Group is organised into three key operating segments:
· North America
· United Kingdom, Ireland, Africa and APAC ("UKIA")
· Europe
For reporting under IFRS 8, each of the three operating segments above
represents a reportable segment.
The revenue analysis in the table below is based on the location of the
customer, which is not materially different from the location where the order
is received and where the assets are located.
Category Examples
Recurring revenue Software subscription revenue
Other subscription revenue
Other recurring revenue
Other revenue Perpetual software licences
Upgrades to perpetual licences
Professional services
Training
Revenue by segment
Year ended 30 September 2025 Change
Statutory and Underlying Organic Organic Statutory Underlying Organic
£m
£m
Adjustments*
£m
Recurring revenue by segment
North America 1,110 (2) 1,108 8% 12% 11%
UKIA 714 - 714 9% 9% 9%
Europe 612 (5) 607 7% 8% 7%
Recurring revenue 2,436 (7) 2,429 8% 10% 9%
Other revenue by segment
North America 28 - 28 13% 17% 17%
UKIA 15 - 15 (3%) (2%) (2%)
Europe 34 - 34 (5%) (4%) (4%)
Other revenue 77 - 77 1% 3% 3%
Total revenue by segment
North America 1,138 (2) 1,136 8% 12% 11%
UKIA 729 - 729 9% 9% 9%
Europe 646 (5) 641 6% 7% 6%
Total revenue 2,513 (7) 2,506 8% 10% 9%
*Adjustments relate to the acquisition of Tritium Software, S.L. ("Tritium
Software") and Fyle Technologies Private Limited ("Fyle").
Year ended 30 September 2025 Change
Statutory and Underlying Organic Organic Statutory Underlying Organic
£m
£m
Adjustments*
£m
Total revenue by type
Software subscription revenue 2,093 (7) 2,086 10% 12% 11%
Other recurring revenue 343 - 343 (1%) 1% 1%
Recurring revenue 2,436 (7) 2,429 8% 10% 9%
Other revenue 77 - 77 1% 3% 3%
Total revenue 2,513 (7) 2,506 8% 10% 9%
*Adjustments relate to the acquisition of Tritium Software and Fyle.
Revenue by segment (continued)
Year ended 30 September 2024
Statutory and Underlying as reported Impact of foreign exchange Underlying Organic Organic
£m
£m
£m
£m
Adjustments*
£m
Recurring revenue by segment
North America 1,028 (34) 994 5 999
UKIA 655 (2) 653 - 653
Europe 574 (6) 568 1 569
Recurring revenue 2,257 (42) 2,215 6 2,221
Other revenue by segment
North America 24 - 24 - 24
UKIA 15 - 15 - 15
Europe 36 - 36 - 36
Other revenue 75 - 75 - 75
Total revenue by segment
North America 1,052 (34) 1,018 5 1,023
UKIA 670 (2) 668 - 668
Europe 610 (6) 604 1 605
Total revenue 2,332 (42) 2,290 6 2,296
* Adjustments relate to the acquisition of Infineo SAS ("Infineo") and Anvyl,
Inc ("Anvyl") in the previous year.
Year ended 30 September 2024
Statutory and Underlying as reported Impact of foreign exchange Underlying Organic Organic
£m
£m
£m
£m
Adjustments*
£m
Total revenue by type
Software subscription revenue 1,910 (34) 1,876 6 1,882
Other recurring revenue 347 (8) 339 - 339
Recurring revenue 2,257 (42) 2,215 6 2,221
Other revenue 75 - 75 - 75
Total revenue 2,332 (42) 2,290 6 2,296
* Adjustments relate to the acquisition of Infineo and Anvyl in the previous
year.
Operating profit by segment
Year ended 30 September 2025 Change
Statutory Underlying adjustments* Underlying and Organic Statutory Underlying Organic
£m
£m £m
Operating profit by segment
North America 231 26 257 21% 14% 15%
UKIA 182 25 207 17% 12% 12%
Europe 117 19 136 12% 31% 28%
Total operating profit 530 70 600 17% 17% 16%
Year ended 30 September 2024
Statutory Underlying adjustments* Underlying as reported Impact of foreign exchange Underlying Organic adjustments** Organic
£m
£m £m £m £m £m £m
Operating profit by segment
North America 192 43 235 (11) 224 (1) 223
UKIA 155 33 188 (3) 185 - 185
Europe 105 1 106 (2) 104 3 107
Total operating profit 452 77 529 (16) 513 2 515
* Adjustments are detailed in note 3.
** Adjustments relate to the acquisition of Infineo and Anvyl in the previous
year.
Adjustments between underlying profit and statutory profit
Year ended 30 September 2025 Year ended 30 September 2024
Operating Profit Operating Profit
profit before tax profit before tax
£m
£m
£m
£m
Statutory measures 530 484 452 426
Recurring items
· Amortisation of acquired intangibles 42 42 48 48
· Other M&A activity-related items 31 31 34 34
· Foreign currency movements on intercompany balances - 1 - (1)
Non-recurring items
· Reversal of property restructuring costs (2) (2) - -
· Reversal of restructuring costs (1) (1) (2) (2)
· Reversal of employee-related costs - - (3) (3)
Underlying (as reported) measures 600 555 529 502
Impact of foreign exchange - - (16) (16)
Underlying measures 600 555 513 486
Recurring items
Recurring items impacting operating profits (reported within selling and
administrative costs) and profit before tax comprise:
· Amortisation of acquired intangibles £42m (2024: £48m) which have
previously been recognised as part of business combinations or similar
transactions.
· Other M&A activity-related items relate to advisory, legal,
accounting, valuation, and other professional or consulting services which are
related to M&A activity as well as acquisition-related remuneration and
directly attributable integration costs. £15m (2024: £5m) of these costs
have been paid in the year, while the remainder is expected to be paid in
subsequent financial years.
Non-recurring items
Non-recurring items impacting operating profits (reported within selling and
administrative costs) and profit before tax comprise:
· Reversal of property restructuring costs £2m (2024: £nil) arising
as a result of a sub-lease entered into for a property site in North America,
which had previously been exited.
· Reversal of restructuring costs of £1m (2024: £2m) relates to
unutilised provisions previously recognised.
· Reversal of employee-related costs of £3m in the prior year
relates to unutilised employee-related provisions recognised in previous years
for French payroll taxes.
In total for the year ended 30 September 2025, cash paid in respect of
recurring and non-recurring items (some of which was incurred in prior
periods) of £41m, comprised £33m of other M&A activity-related items and
£8m of employee-related costs. (For the year ended 30 September 2024, cash
paid in respect recurring and non-recurring items of £44m comprised £39m of
other M&A activity-related items, £3m of restructuring costs and £2m of
property restructuring costs).
The tax impact of recurring and non-recurring adjustments between statutory
and underlying profit before tax is £17m, of which £18m relates to recurring
items and £1m tax credit relates to non-recurring items. For the year ended
30 September 2024 the tax impact is £17m, of which all £17m relates to
recurring items. For the impact of these on the effective tax rates, see note
4.
2. Income tax expense
The effective tax rate on statutory profit before tax was 24% (2024: 24%),
whilst the effective tax rate on underlying profit before tax on continuing
operations was 24% (2024: 24%).
The statutory and underlying effective tax rates are lower than the UK
corporation tax rate applicable to the Group of 25%, primarily due to the
innovation tax credits for registered patents and software, and research and
development activities which attract government tax incentives in a number of
operating territories.
3. Dividends
2025 2024
£m £m
Final dividend paid for the year ended 30 September 2024 of 13.50p per share 135 -
(2024: final dividend paid for the year ended 30 September 2023 of 12.75p per - 129
share)
Interim dividend paid for the year ended 30 September 2025 of 7.45p per share 72 -
(2024: interim dividend paid for the year ended 30 September 2024 of 6.95p per - 70
share)
207 199
In addition, the Directors are proposing a final dividend in respect of the
financial year ended 30 September 2025 of 14.40p. The Company's distributable
reserves are sufficient to support the payment of this dividend. If approved
at the AGM on 5 February 2026 it will be paid on 10 February 2026 to
shareholders who are on the register of members on 9 January 2026. These
financial statements do not reflect this proposed dividend payable.
Earnings per share
Basic earnings per share is calculated by dividing the profit for the year
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the year, excluding those held as treasury
shares and held by the Employee Benefit Trust, which are treated as cancelled,
until reissued.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all potentially dilutive ordinary
shares, exercisable at the end of the year.
Underlying 2025 Underlying Underlying Statutory
as reported*
2024
2024
Statutory
2024
2025
Earnings attributable to owners of the
parent** (£m)
Profit for the year 423 382 370 369 323
Number of shares (millions)
Weighted average number of shares 978 1,007 1,007 978 1,007
Dilutive effects of shares 15 18 18 15 18
Weighted average number of shares for diluted earnings per share 993 1,025 1,025 993 1,025
Earnings per share attributable to owners of the
parent** (pence)
Basic earnings per share 43.19 37.91 36.73 37.74 32.10
Diluted earnings per share 42.52 37.25 36.09 37.16 31.55
* Underlying as reported is at 2024 reported exchange rates.
** All operations in the years relate to continuing operations.
Reconciliation of earnings 2025 2024
£m
£m
Statutory profit for the period attributable to owners of the parent 369 323
Adjustments:
· Recurring items 74 81
· Non-recurring items (3) (5)
Taxation on adjustments between statutory and underlying profit before tax (17) (17)
Underlying profit for the period attributable to owners of the parent (as 423 382
reported)
Impact of movement in foreign currency exchange rates - (12)
Underlying profit for the period (after exchange movement) attributable to 423 370
owners of the parent
4. Non-current assets
Goodwill Other Property, plant and equipment Total
£m
£m
intangible £m
assets
£m
Opening net book amount at 1 October 2024 2,122 228 108 2,458
Additions - 14 71 85
Acquisition 74 28 - 102
Disposals - - (6) (6)
Depreciation, amortisation and other movements - (60) (30) (90)
Exchange movement 17 2 1 20
Closing net book amount at 30 September 2025 2,213 212 144 2,569
Goodwill Other Property, plant and equipment Total
£m intangible £m £m
assets
£m
Opening net book amount at 1 October 2023 2,245 274 104 2,623
Additions - 21 43 64
Acquisition* 24 9 - 33
Disposals - - (7) (7)
Depreciation, amortisation and other movements - (67) (29) (96)
Exchange movement (147) (9) (3) (159)
Closing net book amount at 30 September 2024* 2,122 228 108 2,458
* Adjusted for finalisation of fair value of assets acquired and liabilities
assumed in the acquisition of Infineo in the prior year (see note 11).
5. Equity
Ordinary shares and share premium
Number of Ordinary Share premium Total
shares shares* £m £m
£m
At 1 October 2024 1,071,499,517 11 548 559
Cancellation of shares** (48,209,390) - - -
At 30 September 2025 1,023,290,127 11 548 559
At 1 October 2023 1,100,789,295 12 548 560
Cancellation of shares (29,289,778) (1) - (1)
At 30 September 2024 1,071,499,517 11 548 559
* Issued and fully paid ordinary shares of 1(4/77) pence each.
** Cancellation of shares in the current year resulted in a reduction of the
nominal value of ordinary shares of less than £1m.
At 30 September 2025 the Group held 59,869,507 treasury shares (2024:
66,725,007). During the year, the Group satisfied the vesting of certain share
awards utilising 6,855,500 treasury shares (2024: 7,181,463).
On 19 November 2024, the Group entered into a non-discretionary share buyback
programme to purchase up to £400m of its own shares. On 15 May 2025, the
programme was extended by up to £200m. The extended programme completed in
July 2025, for a total consideration of £600m plus expected associated taxes,
corresponding to the £609m recognised through retained earnings at the
balance sheet date, of which £605m was paid in the current year. The Group
repurchased a total of 48,209,390 ordinary shares as part of the programme.
Employee Benefit Trust
The Employee Benefit Trust (EBT) holds shares in the Company and was set up
for the benefit of Group employees. The EBT purchases the Company's shares in
the market or is gifted these by the Company for use in connection with the
Group's share-based payments arrangements. These shares are accounted for as
treasury shares. Once purchased, shares are not sold back into the market
unless required to settle employee tax liabilities in respect of their share
awards.
At 30 September 2025 the EBT holds 8,064,848 ordinary shares in the Company
(2024: 8,473,802) with £nil of shares purchased during the year (2024:
£55m), funded by the Company, and a nominal value of £nil (2024: £nil).
During the year, the EBT satisfied the vesting of certain share awards
utilising 420,118 ordinary shares (2024: 1,381,398 ordinary shares).
The costs of funding and administering the EBT are charged to the profit and
loss account of the Company in the period to which they relate. The market
value of the shares of the Company held by the EBT at 30 September 2025 was
£89m (2024: £87m).
Other reserves
All components of other reserves are presented on a consolidated basis on the
face of the consolidated statement of changes in equity.
In preparation of the financial statements in the current year, management
have separated treasury share reserve and capital redemption reserve from
retained earnings in the consolidated statement of changes in equity that was
presented in previous years, and presented them within other reserves, in
order to provide greater clarity by disaggregating retained earnings. The
below tables have been presented in this manner for the current and prior
year.
On transition to IFRS 9, an equity classification adjustment was recognised
for which £3m was credited to the translation reserve and £1m to the cash
flow hedging reserve, offset by £4m debited to the cost of hedging reserve.
An adjustment between the cost of hedging reserve and retained earnings of
£1m was also recognised on transition to reflect the cumulative effect of
hedging costs that would have been amortised to the income statement under
IFRS 9 over the life of the Group's existing hedging arrangements up to the
date of adoption.
Translation reserve Cash flow hedging reserve Cost of hedging reserve Merger reserve Total
£m £m £m £m Capital redemption reserve £m
Treasury share £m
reserve
£m
At 1 October 2024 23 4 - 61 (520) 3 (429)
Adjustment on initial application of IFRS 9 hedge accounting 3 1 (3) - - - 1
At 1 October 2024 - adjusted 26 5 (3) 61 (520) 3 (428)
Exchange differences on translating foreign operations and net investment 10 - - - - - 10
hedges
Changes in fair value of foreign currency basis of hedge relationships - - (2) - - - (2)
Amortisation of foreign currency basis of hedge relationships - - 1 - - - 1
Vesting of share awards and exercise of share options - - - - 50 - 50
At 30 September 2025 36 5 (4) 61 (470) 3 (369)
Translation reserve Hedging reserve Merger reserve Treasury share Total
£m £m £m reserve* Capital redemption reserve* £m
£m £m
At 1 October 2023 124 4 61 (515) 2 (324)
Exchange differences on translating foreign operations and net investment (101) - - - - (101)
hedges
Vesting of share awards and exercise of share options - - - 50 - 50
Cancellation of ordinary shares - - - - 1 1
Purchase of shares by Employee Benefit Trust - - - (55) - (55)
At 30 September 2024 23 4 61 (520) 3 (429)
*Other reserves and retained earnings have been restated to present the
treasury share reserve and capital redemption reserve within other reserves.
6. Cash flow and net debt
Reconciliation of profit for the year to cash generated from continuing 2025 2024
operations
£m
£m
Profit for the year 369 323
Adjustments for:
Income tax 115 103
Finance income (12) (19)
Finance costs 58 45
Amortisation of intangible assets 60 67
Depreciation of property, plant and equipment 30 29
Gain on disposal of property, plant and equipment (1) (2)
R&D tax credits (3) (2)
Equity-settled share-based transactions 51 56
Exchange movement - (4)
Changes in working capital:
Increase in trade and other receivables (68) (48)
(Decrease)/increase in trade and other payables and provisions (3) 20
Increase in deferred income 79 57
Cash generated from continuing operations 675 625
Reconciliation of net cash flow to movement in net debt 2025 2024
£m
£m
Cash outflows in the year (pre-exchange movements) (123) (164)
Cash (inflows)/outflows from loans and lease liabilities (280) 18
Change in net debt resulting from cash flows (403) (146)
Cash and lease liabilities recognised from acquisitions of subsidiaries 1 4
or similar transactions
Other non-cash movements (30) (28)
Exchange movement (19) (7)
Movement in net debt in the year (451) (177)
Net debt at 1 October (738) (561)
Net debt at 30 September (1,189) (738)
At Cash flow Acquisition Non-cash movements Exchange movement At
£m
£m
£m
£m
Analysis of change in net debt 1 October 30 September
2024 2025
£m
£m
Cash and cash equivalents 508 (123) 3 - 2 390
Borrowings
Loans due after more than one year (1,156) (295) (2) (2) (21) (1,476)
Lease liabilities due within one year (15) 15 - (17) - (17)
Lease liabilities after more than one year (75) - - (11) - (86)
(1,246) (280) (2) (30) (21) (1,579)
Total (738) (403) 1 (30) (19) (1,189)
At Cash Acquisition Non-cash movements Exchange movement At
£m
£m
£m
Analysis of change in net debt 1 October flow 30 September
£m
2023 2024
£m
£m
Cash and cash equivalents 696 (164) 4 - (28) 508
Borrowings
Loans due after more than one year (1,171) - - (2) 17 (1,156)
Lease liabilities due within one year (14) 18 - (20) 1 (15)
Lease liabilities after more than one year (72) - - (6) 3 (75)
(1,257) 18 - (28) 21 (1,246)
Total (561) (146) 4 (28) (7) (738)
The Group's debt is sourced from sterling and euro denominated bond notes,
with a syndicated Revolving Credit Facility (RCF) also available of £630m.
Year issued Interest coupon* Maturity 2025 2024
£m £m
Bonds
· GBP 350m bond notes 2021 1.63% 25-Feb-31 350 350
· GBP 400m bond notes 2022 2.88% 8-Feb-34 400 400
· EUR 500m bond notes 2023 3.82% 15-Feb-28 437 416
· GBP 300m bond notes 2025 5.63% 5-Mar-37 300 -
· Unamortised issue and discount costs N/A N/A N/A (10) (9)
Unamortised RCF loan costs N/A N/A N/A (1) (1)
Total 1,476 1,156
*This does not include the impact of cross-currency interest rate swaps
entered into in relation to the GBP 350m bond notes and EUR 500m bond notes.
At 30 September 2025, £nil of the RCF was drawn down (30 September 2024:
£nil).
During the year, the Group issued sterling denominated bond notes for a
nominal amount of £300m with a maturity date of March 2037. Net cash proceeds
from the issuance were £297m.
7. Financial instruments
The carrying amounts of the following financial assets and liabilities
approximate to their fair values: trade and other payables excluding tax and
social security, trade and other receivables excluding prepayments and accrued
income, lease liabilities and short-term bank deposits, and cash at bank and
in hand.
The fair value of the sterling and euro denominated bond notes are determined
by reference to quoted market prices and therefore can be considered as a
level 1 fair value as defined within IFRS 13.
The fair value of the cross-currency interest rate swaps held by the Group is
determined using a discounted cash flow valuation technique at market rates
and therefore can be considered as a level 2 fair value as defined within IFRS
13.
The fair value of swaps held by the Group as at 30 September 2025 was a £32m
net asset, comprised of £32m assets (30 September 2024: £16m net asset,
comprised of £29m assets offset by £13m liabilities).
The Group does not hold any financial liabilities whose fair value would be
considered as a level 3 fair value as defined within IFRS 13.
The respective book and fair values of bond notes are included in the table
below.
At 30 September 2025 At 30 September 2024
Book Value Fair Value Book Value Fair Value
£m £m £m £m
Long-term borrowings (excluding lease liabilities) (1,476) (1,400) (1,156) (1,065)
8. Acquisitions and disposals
Acquisitions made during the current period
Tritium Software
On 29 October 2024, the Group acquired 100% equity capital and voting rights
of Tritium Software, S.L. ("Tritium Software"), a company based in Spain, for
a total consideration of £30m. Tritium Software provides a cloud-native,
mobile workforce management solution for field-based sales teams through its
main product, Sage Sales Management (previously branded as ForceManager).
Summary of acquisition £m
Cash consideration 28
Deferred consideration 2
Acquisition-date fair value of consideration 30
Fair value of identifiable net assets (5)
Goodwill 25
Fair value of identifiable net assets acquired
£m
Acquired intangible assets 6
Other net liabilities (1)
Fair value of identifiable net assets acquired 5
A summary of the acquired intangible assets is set out below: Valuation
£m
Useful economic life
Acquired intangible assets (years)
Customer relationships 1 10
Technology 5 7
Acquired intangible assets 6
Acquired goodwill of £25m comprises the fair value of the acquired control
premium, workforce in place and the expected synergies. The goodwill has been
allocated to the Iberia CGU where the underlying benefit arising from the
acquisition is expected to be realised. No goodwill is expected to be
deductible for tax purposes. The results of the business are allocated to the
Europe operating segment in line with the underlying operations.
The outflow of cash and cash equivalents on the acquisition is as follows:
£m
Cash consideration (28)
Cash and cash equivalents acquired 1
Net cash outflow (27)
Transaction costs of £5m relating to the acquisition have been included in
selling and administrative expenses, classified as other M&A
activity-related items within recurring adjustments between underlying and
statutory results. These costs relate to advisory, legal, and other
professional services. See note 3.
Arrangements have been put in place for retention payments to remunerate
employees of Tritium Software for future services. The total cost of these
arrangements will be recognised in future periods over the retention period,
contingent on employment.
The consolidated income statement includes revenue and loss after tax relating
to Tritium Software for the period since the acquisition date, of which both
are immaterial.
On an underlying and statutory basis, revenue would have increased and profit
after tax would have decreased by an immaterial amount, if Tritium Software
had been acquired at the start of the financial year and included in the
Group's results for period ended 30 September 2025.
Fyle Technologies
On 24 July 2025, the Group acquired a 100% controlling interest in Fyle
Technologies Private Limited ("Fyle"). Fyle provides an AI-enabled expense
management platform which transforms how SMBs track and manage expenses, with
an existing customer base in the United States.
Summary of acquisition
£m
Cash consideration 56
Deferred consideration 3
Holdback consideration 4
Acquisition-date fair value of consideration 63
Fair value of identifiable net assets (14)
Goodwill 49
Fair value of identifiable net assets acquired £m
Acquired intangible assets 22
Deferred tax liability (5)
Other net liabilities (3)
Fair value of identifiable net assets acquired 14
A summary of the acquired intangible assets is set out below: Valuation Useful economic life
£m
(years)
Acquired intangible assets
Technology 22 8
Acquired intangible assets 22
Acquired goodwill of £49m comprises the fair value of the acquired control
premium, workforce in place and the expected synergies. The goodwill has been
allocated to the North America CGU where the underlying benefit arising from
the acquisition is expected to be realised. No goodwill is expected to be
deductible for tax purposes. The results of the business are allocated to the
North America operating segment in line with the underlying operations.
The outflow of cash and cash equivalents on the acquisition is as follows:
£m
Cash consideration (56)
Cash and cash equivalents acquired 2
Net cash outflow (54)
Transaction costs of £5m relating to the acquisition have been included in
selling and administrative expenses, classified as other M&A
activity-related items within recurring adjustments between underlying and
statutory results. These costs relate to advisory, legal and other
professional services. See note 3.
Arrangements have been put in place for retention payments to remunerate
employees of Fyle for future services, classified as other M&A
activity-related items. The total cost of these arrangements will be
recognised in future periods over the retention period, contingent on
employment.
The consolidated income statement includes revenue and loss after tax relating
to Fyle for the period since the acquisition date, of which both are
immaterial.
On an underlying and statutory basis, revenue would have increased and profit
after tax would have decreased by an immaterial amount, if Fyle had been
acquired at the start of the financial year and included in the Group's
results for period ended 30 September 2025.
Measurement adjustments to business combinations reported using provisional
amounts
On 9 September 2024, the Group acquired 100% equity capital and voting rights
of Infineo SAS ("Infineo"), for total cash consideration of £34m.
The net assets acquired and recognised in the financial statements for the
year ended 30 September 2024 were based on a provisional assessment of their
fair value while the Group undertook a valuation of the acquired intangible
assets. Given the timing of the acquisition, the acquisition accounting had
not been finalised by the date the financial statements for the year ended 30
September 2024 were approved for issue by the Board of Directors. During the
year, the valuation and acquisition accounting were completed and approved.
The intangible assets identified and subsequently valued as at the date of
acquisition include:
Valuation Useful economic life
£m
(years)
Acquired intangible assets
Customer relationships 1 10
Technology 8 6
Acquired intangible assets 9
The 2024 comparative information has been restated to reflect the adjustment
to the provisional amounts.
As a result of the recognition of intangible assets of £9m, there was an
increase in the deferred tax liability of £1m and a corresponding decrease of
£8m to goodwill.
Acquired goodwill of £24m comprises the fair value of the acquired control
premium, workforce in place and the expected synergies. The goodwill has been
allocated to the France CGU where the underlying benefit arising from the
acquisition is expected to be realised. No goodwill is expected to be
deductible for tax purposes. The results of the business are allocated to the
Europe operating segment in line with the underlying operations.
No other adjustments have been made to the provisional fair value of assets
and liabilities reported at 30 September 2024, as set out below:
Fair value of identifiable net assets acquired Previously reported provisional fair values Measurement adjustments Final fair values
£m
£m
£m
Intangible assets - 9 9
Deferred tax liability - (1) (1)
Other identifiable net assets 2 - 2
Fair value of identifiable net assets acquired 2 8 10
Goodwill 32 (8) 24
Total consideration 34 - 34
The increase in amortisation charge on the intangible assets from the
acquisition date to 30 September 2024 was not material and therefore no
adjustment has been made for this. No changes have been identified to the
directly attributable acquisition related costs which were included during the
financial year ended 30 September 2024 in relation to the acquisition.
9. Related party transactions
The Group's related parties are its subsidiary undertakings and its key
management personnel, which comprises the Group's Executive Leadership Team
members and the Non-executive Directors. Transactions and outstanding balances
between the parent and its subsidiaries within the Group and between those
subsidiaries have been eliminated on consolidation and are not disclosed in
this note.
Key management personnel compensation 2025 2024
£m £m
Salaries and short-term employee benefits 10 12
Share-based payments 8 8
18 20
10. Events after the balance sheet date
Acquisition of Criterion Inc.
On 2 October 2025, the Group acquired 100% equity capital and voting rights of
Criterion Inc. ("Criterion"), a company based in the United States, for fixed
initial consideration of £33m and additional variable consideration of up to
£16m, linked to the future performance of the business. Criterion provides a
unified human capital management (HCM) platform which will enhance Sage's
offering to mid-sized businesses.
Due to the timing of the acquisition being after 30 September 2025, the
results of Criterion are not included in our financial statements for the year
ended 30 September 2025 and the acquisition accounting has not yet been
completed. In line with IFRS 3, the purchase price accounting for the
acquisition will be finalised within 12 months of the acquisition date.
Share buyback programme
On 18 November 2025, The Sage Group plc approved a share buyback programme of
its ordinary shares of up to £300m, which is expected to commence on 19
November 2025, and end no later than 19 March 2026.
Managing Risk
Our Enterprise Risk Management Framework helps us to manage a wide range of
risks, enabling a consistent approach to identifying, managing, and overseeing
risks to support effective decision making and enhance long-term resilience.
The Board has overall responsibility for risk management and internal control,
including setting the Group's risk appetite and ensuring appropriate
governance arrangements are in place. It promotes a strong risk culture and
monitors the internal and external risk environment to ensure the Group's
Principal Risks remain relevant and aligned with strategic objectives.
We monitor Principal Risks against our risk appetite targets using measures
and tolerances, which we evaluate throughout the year to ensure they align
with our strategic objectives.
By tracking these measures, risk owners are able to identify both current and
emerging risks and take timely mitigating action. The Principal Risks outlined
below reflect our strategic priorities and build on the management actions
reported in the Annual Report and Accounts 2024, demonstrating ongoing
progress in strengthening our risk management capabilities.
Key - Stakeholder groups Risk exposure change
Customers Colleagues Partners Shareholders Society Stable Decreasing Increasing
Principal Risk Risk context Management and mitigation
1. Customer Experience We must maintain a sharp focus on the relationship we have with our customers, · Brand-health surveys to provide an understanding of the customer
offering the products, services and experiences they need for success. perception of the Sage brand and its products, used to inform and enhance our
If we meet or exceed their expectations, customers will stay with Sage, market offerings.
increasing lifetime value and becoming our greatest advocates. By aligning our
If we fail to deliver ongoing value to our customers by focusing on their people, processes and technology with this focus in mind, all Sage colleagues · Our Market and Competitive Intelligence team provides insights
needs over the lifetime of their customer journey, we will not be able to help our customers be successful and in turn improve financial performance. that guide our strategy and support our growth.
achieve sustainable growth through renewal.
· Proactive analysis of customer activity and churn data, to
improve customer experience.
Trend · Customer Advisory Boards, call listening, and closed-loop
feedback to constantly gather information on customer needs.
· Customer-journey mapping to ensure appropriate strategy alignment
and alignment to our target operating model.
Stakeholder alignment
· "Customer for life" roadmaps, detailing how products can fit
together, any interdependencies, and migration pathways for current and
potential customers.
· Continuous Net Promoter Score (NPS) surveying to identify
customer challenges and respond in a timely manner to emerging trends.
· Sage Membership for all customers, providing customers with
access to curated resources, tools, and a connected community of business
leaders.
2. Execution of product strategy Sage needs to adapt continuously its approach to new technologies · Robust product organisation and governance model, supported by
and challenges. This requires a clear direction and strategic guardrails to strategic interlock with our Routes to Revenue (RtR) teams, aligning the way
support our go-to-market offerings. By simplifying our product portfolio we deliver product to meet the needs of SMBs.
and partnering with the right businesses, we can enhance our solutions and
If we fail to deliver the capabilities and experiences outlined in our product drive success. · Migration Framework in key countries to support our customers as
strategy, we will not meet the needs of our customers or commercial goals.
they move to the cloud.
· Continued expansion of Sage Intacct outside North America and
for additional product verticals.
Trend
· Enhancing accessibility of Sage cloud products to meet Web
Content Accessibility Guidelines.
· Focus on accountants through a tailored Sage for Accountants
Stakeholder alignment proposition.
· Ongoing deployment of Sage Copilot AI-powered assistant into
existing Sage products, including Sage Intacct and integration into Sage Sales
Management.
· Developing AI agents for use in our core products.
3. Developing and exploiting new business models Sage must be able to identify, design and deploy new innovations to create new · Business unit focused on the Sage Platform to realise the
or enhance existing products and capabilities. Unlocking the ability to do opportunities with automation of accounting processes (like Accounts Payable
this at pace will enable access to new markets and/or customers early, driving and Accounts Receivable).
new revenue and opportunities for the business.
Sage is unable to develop, commercialise, and scale new business models to
· Sage Platform integrating Sage's products with AI and digital
diversify from traditional Software as a Service (SaaS), especially services to enhance workflows, improve customer experiences, and accelerate
consumption-based services and those that leverage data. innovation.
· Enhanced, consistent digital experience for all Sage Business
Cloud users through the Sage Experience Platform.
Trend
· A team focused on the product strategy and assessing new business
opportunities in emerging ecosystems to identify those that may align with
our vision.
Stakeholder alignment · Acceleration of Embedded Services by expanding Sage's Fintech and
Payments ecosystem through strategic partnerships with Stripe, Monzo and Tide.
· Managed growth of the API estate, including enhanced product
development that enables access by third-party API developers and optimisation
of API integrations to improve efficiency.
4. Route to market We have a blend of channels to communicate with our current and potential · Our Global Routes to Revenue team drives a consistent approach to
customers and ensure our customers receive the right information, on the right taking Sage's products to market.
products and services, at the right time. Our sales channels include selling
directly to customers through digital and telephone channels, via our · Deployment of an enhanced reporting tool to track go-to-market
If we fail to deliver a globally consistent blend of route to market channels accountant network and through partners, and we will adapt our approach to metrics using standard definitions across geographies.
in each market, Sage will miss the opportunity to efficiently deliver the target customers in our key verticals. We use these channels to maximise our
right capabilities and experiences to our current and future customers. marketing and customer engagement activities. This can shorten our sales cycle · Acceleration of strategic partnerships to strengthen the Sage
and ensure we improve customer retention, maximising our market opportunity. Platform.
· Three strategic pillars focused on delivery to the market to
Trend align priorities across Sage.
· Centre of Excellence to support our indirect sales and
third-party approach.
Stakeholder alignment · Sage Discovery Centre at our North American headquarters in
Atlanta reaffirms our commitment to helping entrepreneurs, communities, and
customers to thrive in the age of AI.
5. People and performance As we evolve our priorities, the capacity, knowledge, and leadership skills we · Focus on hiring channels to ensure we are attractive in the
need will continue to change. Sage will not only need to attract the right market through our enhanced employee value proposition and enhanced presence
talent to navigate change but will also need to provide an environment where through social media such as Glassdoor, Comparably, X, LinkedIn, and Facebook.
colleagues can develop to meet these new expectations.
If we fail to ensure we have engaged colleagues with the critical skills,
· Reward mechanisms to incentivise and encourage the right
capabilities, and capacity we need to deliver on our strategy, we will not behaviour, with a focus on ensuring fair and equitable pay in all markets.
be successful.
By empowering colleagues and leaders to make decisions, be innovative, and be · Series of Leadership Academies and talent programmes to support
bold in meeting our commitments, Sage will be able to create an attractive the development of internal talent.
working environment. By addressing what causes colleague voluntary attrition,
Trend and embracing the Values of successful technology companies, Sage can increase · OKR Framework defines measurable goals and tracks outcomes of
colleague engagement and create aligned high-performing teams. colleague success.
· Enhancing skills and talent technology ecosystem to identify
capabilities and skills gaps, talent pipeline, development, and career
Stakeholder alignment pathways and mentoring.
· Strategic Workforce Planning Framework across the business.
6. Culture The development of a shared behavioural competency that encourages colleagues · Integration of Values and Behaviours into all colleague
to always do the right thing, put customers at the heart of business and priorities including talent attraction, selection, and onboarding as well as
improve innovation is critical to Sage's success. Devolution of decision OKRs.
making, and the acceptance of accountability for those decisions, will need to
If we do not define, shape and proactively manage our culture in line with our go hand in hand as the organisation develops and sustains its shared Values · All colleagues encouraged to take up to five paid Sage Foundation
brand Values, we will be challenged to deliver our strategic priorities and and Behaviours, and fosters a culture that provides customers with a rich days each year, to support charities and provide philanthropic support to the
purpose; we will risk disengaging colleagues, increasing attrition, and digital environment. community.
impacting our ability to attract and retain diverse talent.
· DEI strategy focused on building diverse teams, an equitable
culture, and fostering inclusive leadership. This is supported by strategic
We will also need to create a culture of empowered leaders that supports the plans to track progress, ensuring we meet our commitments, including
Trend development of ideas, and that provides colleagues with a safe environment no tolerance of discrimination and equal chances for everyone.
allowing for honest disclosures and discussions. A trusting and empowered
environment can help sustain innovation, enhance customer success, and · Code of Conduct training for all colleagues (including
encourage the engagement that results in increased market share. anti-bribery and corruption requirements) delivered as snippets, so we can
signpost relevant training at colleagues' point of need.
Stakeholder alignment
· Core e-learning modules, with regular refresher training.
· Whistleblowing and incident-reporting mechanisms so issues can be
formally reported and investigated.
· Scaling Sage culture initiatives, including target culture
measurement framework, leadership assessments, and alignment of people
processes.
7. Cyber security Stakeholder trust is central to Sage's growth and cyber security is an · Multi-year cyber security programmes in IT and Product to ensure
essential component of that. Failure to safeguard customer and colleague data we are continuously improving, and reduce cyber risk across technology,
and ensure the availability of our products and critical services could have business processes, and culture.
severe reputational, legal, and financial consequences. This means we must be
If we fail to ensure an appropriate standard of cyber security across the confident our cyber security controls, and the culture and awareness of our · Accountability within both IT and Product for internal and
business, we will not be able to combat cyber threats and will fail to meet colleagues are sufficient to mitigate the dynamic and evolving cyber risk external data being processed by Sage.
our regulatory obligations and lose the trust of our stakeholders. environment, while also supporting the agility and innovation of the business.
· Formal certification schemes maintained across the business
include internal and external validation of compliance.
Trend · All colleagues are required to undertake regular awareness
training for cyber security and information management.
· A Cyber Security Risk Management Methodology and standards are
deployed to provide clear requirements and objective risk information on our
Stakeholder alignment assets and systems.
· Sage Security Champions help amplify and embed a secure culture.
· An in-house Cyber Defence Operations team to proactively detect,
respond to, and prevent cyber threats 24/7.
· Continued investment in strengthening business resilience and
elevating crisis management capabilities.
8. Data and AI governance Data is central to the Sage strategy and our ambition to deliver sustainable · Our AI and Data Ethics Principles ensure the responsible use of
growth by leveraging AI and expanding the Sage Platform. Our strategy is customer data in support of our strategy, with an ethics checklist in place to
underpinned by our ability to innovate customer propositions, improve insight assess adherence to these principles.
and decision making, and create new business models and ecosystems. The
If Sage fails to collect, process, store, and use data in a way that is successful ability to use data will accelerate our growth and will be key · Governance policies, processes, and tooling to enhance and manage
compliant with regulation, internal policy, and our ethical principles, we in helping customers transform how they run and build their businesses, data quality, trust, and privacy.
will lose the trust of our stakeholders. and we must do this in a way that is compliant with laws and regulations,
and in line with our Values. · The implementation of our AI Governance Framework, supported by
an AI Inventory and AI assurance process, to ensure that the development and
use of AI align with our risk appetite and meet legal, regulatory, ethical,
If we fail to recognise the value of our data and deliver effective data and security requirements.
foundations, we will be unable to realise the full potential of our data
assets. · Data Privacy Framework governing the collection, use, and
protection of personal data in compliance with applicable laws and
regulations.
Trend · Our Sustainability, AI, and Data Ethics Committee, which includes
members from the Executive Leadership Team and Sage Board, governs activities
relating to data and AI ethics.
· We require all colleagues to undertake awareness training for
Stakeholder alignment data protection, with a focus on all relevant data privacy laws and
regulations.
· Our Trust and Security Hub supports our customers and their
understanding of cyber security, data privacy, and AI and data ethics in Sage
products.
9. Readiness to scale As Sage continues to build sustainable growth, we continue to focus on scaling · Cost optimisation of cloud native products and continued
our platform services environment in a rigorous, agile, and speedy manner to migration of legacy footprint to public cloud.
ensure we provide a consistent and healthy cloud platform and associated
network. We must provide the right infrastructure and operations for all our · Accountability across product owners, underpinned by ongoing risk
As Sage's ambition grows, if it fails to ensure its cloud products can build customer products, and a hosting platform together with the governance to assessments and continuous improvement projects.
and operate at an industrial, global scale it will erode its competitive ensure optimal service availability, performance, security protection, and
advantage. restoration (if required). · Formal onboarding process through ongoing portfolio management.
The hosting of its products must achieve economies of scale, aligned to · Incident and problem management change processes adhered to for
ambition, in parallel with the ability to accelerate to market with quality. all products and services, with new acquisitions onboarded in less than 90
Both must be achieved with reduced environmental impact and zero customer days.
impact.
· Service-level objectives including uptime, responsiveness, and
If not addressed, Sage's cloud products would be less resilient and less able mean time to repair.
to respond to its customer expectations.
· Defined real-time demand-management processes and controls, and
disaster-recovery capability and operational-resilience models.
Trend · A governance framework to optimise operational cost base in line
with key metrics.
· All new acquisitions required to adopt Sage cloud operation
standards.
Stakeholder alignment
10. Environmental, social, and governance We invest in education, technology, and the environment to give individuals, · Sage's Sustainability and Society strategy, informed by a
SMBs, and our planet the opportunity to thrive. rigorous materiality assessment, focusing on three pillars: Protect the
Planet, Tech for Good, and Human by Design.
If Sage is unable to respond to evolving stakeholder expectations and ESG
· Ensuring adequate executive oversight through
regulation, Sage could face fines and potential legal action, damaging Sage's Internally, it is essential that Sage understands the potential impact the Sustainability, AI, and Data Ethics Committee.
reputation and brand, and diminishing stakeholder trust and credibility. of climate change on its strategy and operations and considers appropriate
mitigations. · Enabling accountability through integration of ESG measures
within long-term incentive plans.
In addition, if Sage fails to respond to the range of opportunities and
· An integrated framework to manage ESG-related risk and physical
risks associated with Sustainability and Sage Foundation, it would be less Societal and governance-related issues are integral to Sage's purpose and and transitional climate risks, as detailed by TCFD.
resilient, less competitive, and could put its licence to operate at risk. Values and to the achievement of Sage's strategy.
· External limited assurance obtained over selected metrics to
ensure accuracy of sustainability data and claims.
Trend
Stakeholder alignment
i (#_ednref1) See Appendix 1 for full definitions and guidance on the usage
of the Alternative Performance Measures.
ii (#_ednref2) To aid comparability, underlying and organic measures for the
prior period have been retranslated at current period exchange rates and
exclude recurring and non-recurring items, while organic measures also adjust
for the impact of acquisitions and disposals. A reconciliation of underlying
and organic measures to statutory measures is set out on pages 6 and 7.
Underlying and organic measures are defined in Appendix 1.
All references to revenue, profit and margin are on an underlying basis unless
otherwise stated.
iii (#_ednref3) ForceManager (now branded Sage Sales Management) was
acquired in October 2024, Fyle in July 2025, and Criterion in October 2025.
iv (#_ednref4) United Kingdom, Ireland, Africa and Asia-Pacific (APAC).
v (#_ednref5) Cloud native solutions run in a cloud environment enabling
access to up-to-date functionality at any time, from any location, via the
internet.
vi (#_ednref6) Cloud connected solutions are deployed on premise with
significant functionality delivered through the cloud.
vii (#_ednref7) Retranslated at current year exchange rates.
viii (#_ednref8) Underlying and organic revenue and profit measures are
defined in Appendix 1.
ix (#_ednref9) Recurring and non-recurring items are defined in Appendix 1,
and detailed on page 7 and in note 3 of the financial statements.
x (#_ednref10) Recurring and non-recurring items are defined in Appendix 1
and detailed in note 3 of the financial statements.
xi (#_ednref11) Impact of retranslating FY24 revenue and costs at FY25
average rates.
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